Being involved in an Australian startup gives you “street cred” these days. However, before you create a startup or join a startup, make sure you’re conversant with the right terms, by reading our Australian startup vocabulary.
Why? Because if you know these terms, it will help you in 3 ways:
- As an entrepreneur, you’ll find it easier to communicate with fellow entrepreneurs and pitch your startup to VCs.
- As an employee, merely mentioning some of these terms in your interview will give you a good chance to be hired by a startup, provided you are willing to work there!
- As a student, you’ll get to learn what these terms mean, which perhaps will be helpful if you are preparing a B-plan or participating in a business quiz / B-plan competition.
So, here’s our succinct guide to the words found across Australia in various groups, accelerators and startups themselves.
Australian Startup Vocabulary
B2B aka Business-To-Business – A transaction that occurs between two companies. Example – B2B transaction happens between manufacturer and a wholesaler, or between a wholesaler and a retailer.
B2C aka Business-to-Consumer – A transaction that occurs between a company and a consumer. B2C transaction happens between a company that sells products to consumers.
Bootstrapping – using your own business generated income to continue to grow the business. That is, not taking investor money, and using customer money to grow.
Break-Even – Break even is a technique used by companies to know when their total revenue is just sufficient to cover the total cost. The point at which expenses and revenue are equal, i.e. there is no net loss or gain, is known as break-even point or BEP.
Buy-In – An act when the buyer (investor) is forced to repurchase shares because the seller (founder) was not able to deliver the promised securities.
Buy-Out – An act in which the seller (founder) borrows money (or issues stock) from the buyer (investor). It’s a common method for growing a business – inorganically!
Core competency – A phenomenon in which a startup delivers value to their customers with a specific unique set of skills/techniques. It not only provides value to customers but also creates barrier to entry for competitors.
Elevator Pitch – A short speech used by entrepreneurs while pitching their project to venture capitalists. The idea is to provide sufficient overview about your project to a VC to get him excited about it. The catch is – you have to do it in 20-60 seconds!
ESOP – An abbreviation for Employee Share Ownership Plan, ESOPs serve a great way for companies to give their employees shares in their company as part of their salary.
First Mover – A term used for companies who create a competitive advantage by being the first to enter a specific market or industry. Example – Airbnb or Uber.
Godfather Offer – An undeniable takeover offer made to a target company by an acquiring company in which the acquisition price is extremely generous compared to the prevailing market price.
Growth Hacker – someone who creates agile marketing through scrappy startup style behaviour. Not a typical marketer who follows convention when promoting their startup.
Halo Effect – A term which refers to the bias shown by customers towards certain products because of favourable experiences with other products made by the same company. Examples include Apple, Nike.
IPO – An abbreviation for Initial Public Offering, IPO marks the stock market launch of a company. It is the first sale of stock by a private company to the public.
Lean Canvas – a business planning tool favoured by startup founders, which uses a single A4 sheet of paper. See this explanation of lean canvas for more information.
Mission Statement – A short sentence or paragraph that explains in simple and concise terms why that company exists.
Niche – It’s a word generally used to refer that portion of a market that is focused, targetable and addresses a need that is not being addressed by conventional providers.
Pitch – To attempt to promote or sell, often in a high-pressure manner.
Pivot – The act of modifying a business model. We have decided to ‘pivot’ to a B2C, instead of B2B, for example.
Scalable – The capability of a system that can be easily expanded or upgraded on demand while making sure that it continues to function well.
Sandbag – A tactic used by a target company to deliberately delay an event or action to prevent an acquiring company from taking them over in the hope that a more favorable acquiring company will take them over.
Startup – A newly created company that has a limited operating history.
Startup Capital – The amount of money required to start a new business; for office space, inventory, marketing, etc. It is also referred as seed money.
Valuation – A process that decides the price (value) at which a willing buyer (investor) and seller (founder) can complete a transaction.
Wantrepreneur – Someone who aspires to become a founder or entrepreneur, however never actually reaches this goal.
So there is our Australian startup vocabulary, the common words found among the various Australian startup communities and people.